Bitcoin (BTC/USD) is falling from the psychological level of $40,000. It is currently trading at $38,800 and it is likely to reach the support of 4/8 Murray at $37,500 in the next few hours.
Nasdaq-100 has a 70% positive correlation with Bitcoin. Last week, the Nasdaq-100 fell sharply losing more than 8%.
This fall in the equity market was due to the strong fear on the part of investors that the Federal Reserve will increase its interest rate in May and as a consequence it will put downward pressure on risk assets such as BTC and the Nasdaq-100.
Since March 28, when the BTC reached the level of $48,206, it turned down and continues its downward movement. Today in the Asian session, it reached a low of $38,639.
During the last few weeks, Bitcoin lost more than 20% of its value, and it is likely that it could reach a key support at $37,500 and a technical bounce could occur.
On April 21, Bitcoin approached the zone 21 SMA and 200 EMA around $43,000. As it failed to consolidate above the level of $43,000, Bitcoin made a technical correction and is now continuing the downward move. According to the technical indicators, BTC is showing signs of exhaustion.
According to the daily chart, Bitcoin has immediate support in the zone 4/8 Murray around $37,500. Below this level is the 600 SMA around $34,500. Both levels could be a good opportunity to buy Bitcoin and wait for a recovery in the next few days, the target will be 6/8 Murray at 43,750.
Conversely, a close on daily charts below $34,375 could accelerate the bearish move and we could expect a sharp drop towards the psychological level $30,000.
Seeing on the daily chart that BTC is below the resistance of 6/8 Murray and below the 200 EMA, it means that any bounce or pullback towards these zones will be seen as an opportunity to sell with targets at $37,500 and $34,375.
